Citing the high cost of doing business as a public company, a struggling, Honolulu-based bank is reverting to private ownership.
Hawaii National Bank chief executive officer Warren K.K. Luke said last week that the bank's stock is too illiquid to justify the legal and accounting expenses that go with routine Securities and Exchange Commission filings. Hawaii National's stock is not listed on any exchange. Its shares traded Thursday at $45, the first transaction in eight trading days.
"Since the company's stock is unlisted and thinly traded, the benefits of public ownership are minimal," said Mr. Luke, whose family owns 88% of the shares outstanding.
Mr. Luke said the $312 million-asset bank must cut costs to help boost the bottom line. It lost $346,000 in 1998 and posted negative returns on both assets and earnings.
"We really need to tighten up operations, and we're trying to do it without a lot of layoffs," said Mr. Luke.
Much of Hawaii National's woes can be blamed on the state's economy, which has been in a slump since 1990. Hawaii relies heavily on tourism, and this industry has been hurt by the decade-long stagnation in Japan.
Hawaii National wants to put larger chunks of its stock in fewer hands, reducing the shareholder total to about 300.
More than 850 stockholders own fewer than 50 shares, and hundreds more own fewer than 200. Under a proposal filed with the SEC last week, Hawaii National would pay stockholders $45 a share for up to 200 shares per owner.
Those with more than 200 shares would remain stockholders.
The plan is expected to be presented to shareholders at a meeting in July.
